The Smart Watch Crisis continues apace, as the Apple Watch dominates the entire Swiss watch industry. In terms of units sold, the gap between Chinese-made Apple Watches and Swiss-made Swiss watches (some with Chinese parts) is becoming a chasm. The Swatch Group may not be on death watch, but the writing’s on the wall. And the ‘net. According to industry analyst Steven Waltzer . . .
“Apple Watch shipped [an estimated] 30.7 million units worldwide in 2019, growing a healthy 36 percent from 22.5 million in 2018. A blend of attractive design, user-friendly tech and sticky apps makes the Apple Watch wildly popular in North America, Western Europe and Asia.”
Neil Mawston, Executive Director at Strategy Analytics, added, “We estimate the entire Swiss watch industry together shipped 21.1 million units worldwide in 2019, falling 13 percent from 24.2 million in 2018. Analog wristwatches remain popular among older consumers, but younger buyers are tipping toward smartwatches and computerized wristwear.”
Older consumers have this nasty habit of dying off, leaving less than rosy prospects for the Swiss watch industry. Not to put too fine a point on it, the Apple Watch dominates both the present and the future.
Mr. Waltzer reckons there’s a reckoning coming, but claims all is not lost – yet. “The window for Swiss watch brands to make an impact in smartwatches is closing. Time may be running out for Swatch, Tissot, TAG Heuer, and others.”
Clearly. In fact, if Mr. Waltzer’s betting his kids’ college education fund on a Swiss smartwatch counter-attack, he’d do well to check out local state universities.
Swatch’s SWATCHPay! is a non-starter stuck in the Alps. Alpina’s Swissanese “horological smartwatches” offer less than six functions via a dull, kludgy phone app. Breitling’s Exospace B55 Connected – a $9k+ hybrid that can’t even guide you through a breathing exercise – never got off the ground. Enter “smartwatch” into Breitling’s search engine and . . . zero results.
At the same time, the Swiss watch industry is taking a major hit from the disappearance of the high end Chinese watch market – as the coronavirus shuts down Macau’s gambling mecca and destroys consumer confidence in the entire region. The only bright spot: Apple Watch production is in limbo – more than a million furloughed Chinese workers await the perils of close-contact in coronavirusland.
Even if the Apple Watch supply chain stays stopped, it’s only a matter of time before Cupertino’s favorite son gets production back up and running, somewhere, somehow. There’s billions of dollars at stake. Billions that used to go into the bank accounts of Swiss watchmakers, that will never flow that way that fast again.